Centre’s net direct tax collections rise 8% in April–Dec, misses budget estimates amid tax cuts

India’s net direct tax collections rose 8% to ₹17.04 lakh crore in the period from April 1 to December 17, government data showed on Friday, falling short of the growth projected in the Union budget as tax relief for individuals weighed on revenue from personal income taxes.

Net corporate tax collections stood at ₹8.17 lakh crore during the period, while non-corporate taxes, mainly personal income taxes, amounted to about ₹8.47 lakh crore, according to income tax department data.

Net receipts from securities transaction tax (STT) were ₹40,195 crore as of December 17, slightly higher than the collections in the year-ago period.

Gross direct tax collections, before adjusting for refunds, rose 4.16% year-on-year to ₹20.01 lakh crore during the period, the data showed.

After accounting for refunds, companies paid just over ₹8.17 lakh crore in taxes, registering a 10.5% annual increase, in line with the growth assumed in the Union budget for the 2025-26 fiscal year.

The government has projected direct tax collections of ₹25.20 lakh crore in the current fiscal year, an increase of 12.7% from a year earlier.

Net personal income tax collections grew 6.4% year-on-year to about ₹8.47 lakh crore, well below the 14.4% growth projected in the budget, as cuts in tax slab rates and rebates curbed revenue growth.

In this year’s budget, the government lowered personal income tax rates and offered a rebate for individuals earning up to ₹12 lakh annually for salaried taxpayers.

The data showed the tax department issued refunds worth ₹2.97 lakh crore during the period, down 13.5% from a year earlier.

At the gross level, corporate tax collections rose 7.5%, while non-corporate tax collections increased just 1.3% year-on-year.

The rationalisation of tax deducted at source (TDS) and tax collected at source (TCS) in the FY25 and FY26 budgets has, according to officials, contributed to lower refunds so far this year.